Buy-Side Due Diligence Advisory

PLANNING

The first step in mergers and acquisitions is to formulate a plan for carrying out the investment. First, analyze how it will be beneficial when you acquire another company by considering the present market situations, your financial conditions, and future estimates.

Next, think of what value the target company will bring after you have acquired it. In this process, analyze the target company’s size, its profit margins, products or services that it provides, company culture, its consumer base, and other factors relevant to your status as a buyer.

Next, you have to establish contact with one or two prospective target companies. At this stage, team up with an independent valuation consultant such as Valueteam because we can offer you the right advice about choosing an appropriate industry sphere and the most suitable target companies for acquisition based on your requirements.

Once you have selected a few target companies from the list provided by Valueteam, we will send out a letter of intent (LOI) or teaser to the target companies in which we mention your interest in carrying out the merger or acquisition, which initiate preliminary discussions with the target company.

DATA

The LOI sent out to the target company by Valueteam will also assist you in gathering vital information about the target company, which will be helpful during the due diligence stage. In addition, our due diligence experts apply aggregate and analytical methods to treat the data thus gathered.

Thus, you will study the information related to actual and recognized competitive benefits and prioritize the prospective causes of synergy. Next, Valueteam will examine the data and match corresponding data between your company and the target company. During this process, a company should get and analyze the following data of the target company:

General – Information, documents, business plan, etc., to understand the corporate structure of the target company.

Company ownership – It is essential to get insights into the target company’s ownership, which is vital during the M&A process.

Accounting/financial – Target company’s financial performance and data analysis are critical. Some of the information reviewed are historical statements, present operating results, budgets, business plans, and projected financial data.

Operational – Understanding seller’s systems and processes to recognize the threats from implementing the business operations. This includes analysis of the current team, business structure, business operations, partnerships, network, etc.

DUE-DILIGENCE

Performing due diligence is the most crucial step in the M&A process, and hence, we suggest that you hire an independent valuer such as Valueteam to get the correct data and make the merger or acquisition successful.

At this stage, Valueteam will get in touch with the target company to obtain vital information about its business and financials so that you can assess the value of the company both as a separate entity and as a prospective merger or acquisition.

Apart from financial evaluation, it would help if you also studied the target company’s work culture, external criteria that may influence the accomplishment of the transaction, timing, and other types of collaborations.

For accomplishing successful due diligence, Valueteam will generate several due diligence models that will assist you in determining whether to carry out a deal or not. Besides, we will also perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis for the target company. All these steps will enable you to choose the right company for acquisition.

RISK

Carrying out adequate due diligence is the key to a successful M&A transaction. Our due diligence protocol helps in risk reduction as follows:

When you take up an effective due diligence process, you are at higher success in your transactions. It is because our due diligence procedures make you feel more comfortable as a buyer that your expectations are precise about a deal. Moreover, in an M&A deal, taking up due diligence considerably reduces your risk as a buyer.

Valueteam’s due diligence methodologies offer you confidential information about the target company, which helps you to verify preliminary synergistic theories. Consequently, you will be able to test the proposed value of a company. Besides, the results obtained from our due diligence methodologies will expedite the M&A process, and the deal moves to the final stages.

The due diligence process enables you to recognize and evaluate the risks, accountabilities, and business issues in the target company before completing the deal, thereby preventing huge losses.